Subsistence minimum (životní minimum) in credit assessment
The statutory minimum income for food and other basic personal needs, set by Act No. 110/2006 Coll., on the subsistence and existence minimum. The amount depends on the number and age of household members. When assessing a mortgage, banks deduct it from net income as essential spending, and what remains must cover repayments and housing costs with a buffer.
Example
A family with two children and a net income of CZK 70,000 applies for CZK 4,000,000 over 25 years at 5.00 % (payment CZK 23,384). The bank deducts the subsistence minimum for all four members, housing costs and other repayments. If too little is left after that, it cuts the loan amount, even though a DSTI of 33 % would be acceptable on its own.
In practice
The calculation is internal, and each bank adds its own mark-ups to the subsistence minimum (housing costs, a coefficient per child). That is why children in the household lower the maximum mortgage even when income is unchanged. Leaving a dependent child or maintenance payments off the application does not help: the bank finds out from the documents, and the whole application loses credibility.
How it differs
DSTI measures the share of income that goes on repayments, whereas the subsistence minimum checks how much money the household actually has left after the payment. The existence minimum (existenční minimum) is a lower amount used for social purposes, and banks do not apply it to mortgages.
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